Netherlands: Manufacturing PMI dips to three-month low in October
At the outset of the fourth quarter, manufacturing business conditions improved at a three-month soft pace as the NEVI Manufacturing Purchasing Managers’ Index (PMI) falling to 50.4 in October from 52.5 in September. Despite the downtick, the headline reading remained above the neutral 50-threshold that separates an overall increase from decrease compared to the prior month.
October’s print was reflective of softer growth in output and orders. Output growth nearly stalled from the prior month despite firming demand and the restarting of projects. While demand strengthened amid improving market dynamics, the growth from the prior month was mild. Moreover, employment continued to fall due to redundancies, company restructuring and the non-replacement of leavers, albeit at a softer pace than the previous month.
Looking at prices, input prices rose at the strongest pace since April 2019 due to greater raw material costs. Output prices, however, rose only slightly. Lastly, manufacturing confidence regarding the 12-month outlook remained positive, albeit historically subdued. Concerns about the evolution of the pandemic weighed on sentiment levels.
Commenting on the result, Albert Jan Swart, manufacturing sector economist at ABN AMRO, noted:
“The recovery of Dutch manufacturing is losing steam [and] it seems unlikely that the recovery will continue during the next few months. In order to deal with the ‘second wave’ of coronavirus infections, Germany, France and other countries have imposed partial lockdowns. These new measures will suffocate Europe’s economic recovery.”